Farebox Recovery Efficiency

photo by VeloBusDriver

By unfortunately-unchallenged tradition, most transit agencies obsess with a deceptive metric they call "Farebox recovery ratio" - the amount of fares collected over a specific period of time, divided by operational costs over the same period.

King County Metro has a goal of 25% farebox recovery. Sound Transit has varying farebox recovery goals on its different services: 20% for ST Express, 23% for Sounder, and 40% for Link Light Rail.

These numbers are actually gross farebox recovery, and can be cooked simply by redefining the divisor.

A somewhat more useful metric would be net farebox recovery, which is what is left over after the costs of fare collection are subtracted from gross fares received. These costs include costs for printing fare media, cash handling costs, costs for fare collection equipment replacement, costs for staff devoted to fare collection and enforcement, and operational costs caused by extra dwell time to collect fares. Metro estimates its annual cash fare collection costs at $2.5 - 3 million (page 28), not counting operational inefficiencies caused by cash fumbling.

I'd like to suggest a third metric, which would involve no additional data collection beyond what is needed to calculate gross and net farebox recovery: farebox recovery efficiency, which is to say, net farebox recovery divided by gross farebox recovery.

This metric could help bring a reality check to how the current fare systems and fare changes being considered are impacting agencies' bottom lines.

As covered last month, Metro is in the process of considering a fare change. Metro has three oddball aspects of its fares that don't mesh with the fare systems of other agencies in the region.

* a peak-hour surcharge
* a zone boundary that isn't a county line.
* paper transfers

The committee vetting Metro's fare change proposal will likely get to see how getting rid of the first two features will impact gross farebox recovery. The third feature, which adds confusion to inter-agency transfers, is a political hot potato unlikely to be touched by the committee.

But dealing with that third feature could impact what level of flat fare Metro could afford. Eliminating paper tranfers would immediately wipe out $200,000 of annual printing costs, and likely yield a significant reduction in change fumbling. However, such savings would not be reflected in the gross farebox recovery projections.

Bringing the net farebox recovery and farebox recovery efficiency data to the table, and putting the elimination of paper transfers on the table, could make the difference between a more efficient $2.75 Metro flat fare and a less efficient $3.00 Metro flat fare.